India's dependence on imported crude has risen, with imports accounting for 88.6 per cent of oil consumption in the first 10 months of the current fiscal year ending on 31 March. The figure, reported by the Petroleum Planning and Analysis Cell of the oil ministry, underlines persistent challenges in lifting domestic oil production despite sustained government support. Rising demand has outpaced local output, increasing reliance on foreign supplies.

The government has launched a licensing round for 50 oil and gas blocks to attract more foreign investment into the sector and aims to expand exploration. Officials are also building out wind and solar capacity to address overall energy demand growth and to diversify the energy mix. The licensing initiative is intended to stimulate exploration activity and bring capital and technology into marginal basins. Refiners have adjusted procurement as global supply dynamics evolve.

The Prime Minister has presented the energy sector as a major investment opportunity, identifying Rs 500 billion (bn) in potential projects across exploration, refining and liquefied natural gas. By the end of the decade the government intends to raise investment in oil and gas to Rs 100 bn and to expand the scope of exploration to one million (mn) square kilometres, with more than 170 blocks already awarded. The Andaman and Nicobar basin has been identified as a prospective hydrocarbon hotspot and a focus for future activity. Policy measures and block awards are expected to support longer term production prospects.

India overtook China in 2024 as the leading driver of global oil demand as mobility and freight fuel consumption continued to grow while gasoline and diesel use in China slowed amid electrification and use of LNG fuel in heavy vehicles. Imports set records last fiscal year and appear on track to exceed them again, with preliminary January data indicating imports were approaching an all time high of five point two mn barrels per day as refiners diversified away from Russian crude. The balance between securing supplies and accelerating domestic production will be crucial for India's energy strategy.